07 April, 2017

Demystifying Alexander Nahum Sack and the doctrine of odious debt

Eric
Tousaint’s study of the odious debt doctrine

by
Eric Toussaint

Part
16 - A short refresher course on the United States’ policy toward
its neighbours in the Americas

In 1823, the
government of the United States adopted the Monroe Doctrine. Named
after a Republican president of the USA, James Monroe, it condemns
any European intervention in the affairs of “the Americas.” In
reality, the Monroe Doctrine served as cover for a policy of more and
more aggressive conquests on the part of the USA to the detriment of
the new independent Latin American States, beginning with the
annexing of a large part of Mexico in 1840s (Texas, New Mexico,
Arizona, California, Colorado, Nevada and Utah). North American
troops occupied Mexico’s capital city in September 1847. It should
also be pointed out that the government of the USA attempted to
exterminate all native peoples, the “redskins,” who refused to
submit. And those who did submit were still subjected to atrocities,
and ended up on reservations.

In 1898, as
we have seen, the United States declared war on Spain and took
control of Cuba and Puerto Rico.

In 1902, in
contradiction of the Monroe Doctrine, Washington did not come to the
defence of Venezuela when it was the victim of armed aggression by
Germany, Britain, Italy and Holland with the goal of forcing the
country to repay debt. Then the United States intervened
diplomatically to see to it that Caracas resumed debt repayment. This
attitude on the part of Washington gave rise to a major controversy
with Latin American governments, and in particular with the Argentine
Minister of Foreign Affairs, Luis M. Drago, who declared: “The
principle I would like see recognized is that] a public debt cannot
give rise to the right of armed intervention, and much less to the
occupation of the soil of any American nation by any European power.”
This principle was to become known as the Drago doctrine. The debate
among governments ended in an international conference at The Hague
which led to the adoption of the Drago-Porter Convention (from the
name of Horace Porter, a United States soldier and diplomat) in 1907.
It called for arbitration to be the first means of solving conflicts:
any State signing the Convention must agree to submit to an
arbitration procedure and participate in it in good faith, failing
which the State demanding repayment of its debt would have the right
to use armed force.

In 1903,
President Theodore Roosevelt organised the creation of Panama, which
was separated from Colombia against the country’s will. This was
done to allow the Panama Canal to be built under Washington’s
control.

In 1904, the
same president announced that the United States considered itself to
be the policeman of the Americas. He pronounced what is known as the
“Roosevelt Corollary to the Monroe Doctrine”: “Chronic
wrongdoing, or an impotence which results in a general loosening of
the ties of civilized society, may in America, as elsewhere,
ultimately require intervention by some civilized nation, and in the
Western Hemisphere the adherence of the United States to the Monroe
Doctrine may force the United States, however reluctantly, in
flagrant cases of such wrongdoing or impotence, to the exercise of an
international police power.”

In 1915 the
United States invaded Haiti under the pretext of recovering debts and
occupied the country until 1934. Eduardo Galeano writes: “the
United States occupied Haiti for twenty years and, in that black
country that had been the scene of the first victorious slave revolt,
introduced racial segregation and forced labor, killed 1,500 workers
in one of its repressive operations (according to a U.S. Senate
investigation in 1922), and when the local government refused to turn
the Banco Nacional into a branch of New York’s National City Bank,
suspended the salaries of the president and his ministers so that
they might think again.” Other armed interventions by the
United States took place during the same period, but an exhaustive
list would be too long.

This brief
summary of the intervention and policies of the United States in the
Americas in the 19th and early 20th centuries gives us an
understanding of Washington’s true motives in the debt repudiations
in Cuba in 1898 and Costa Rica in the 1920s.

In 1935,
Major General Smedley D. Butler, who took part in many US expeditions
in the Americas, writing during his retirement, describes
Washington’s policies as follows: “I spent 33 years and four
months in active military service and during that period I spent most
of my time as a high class muscle man for Big Business, for Wall
Street and the bankers. In short, I was a racketeer, a gangster for
capitalism. I helped make Mexico and especially Tampico safe for
American oil interests in 1914. I helped make Haiti and Cuba a decent
place for the National City Bank boys to collect revenues in. I
helped in the raping of half a dozen Central American republics for
the benefit of Wall Street. I helped purify Nicaragua for the
International Banking House of Brown Brothers in 1902-1912. I brought
light to the Dominican Republic for the American sugar interests in
1916. I helped make Honduras right for the American fruit companies
in 1903.”